Preparing for your future and ensuring you have a strong financial position is very important. Unfortunately, many people will find that setting aside additional money and preparing for retirement, and other long-term goals can be challenging, confusing, and stressful. One individual that has helped many people prepare for the future is financial planner Darcy Bergen. There are various financial planning tips that he and other financial services professionals would recommend you follow to ensure you reach your goals.
Have a Goal and Plan
One of the first tips that you should follow when you are looking to prepare for the future is to have a goal and financial plan. Many people do not know where to begin when it comes to preparing for the future. However, before you can make a plan, you need to have a goal. Generally, you should aim to have enough income and assets that will replace up to 90% of your pre-retirement income, although this can vary considerably from one person to the next based on needs. Retirement income can be received through social security, pension income, withdrawals from retirement accounts, and other sources.
When it comes to long-term financial planning, the sooner you start preparing, the better off you will be. Due to compound interest, those who start saving and preparing in their early 20s will have a much easier time reaching their goals than those who start just ten years later. While you may not have much disposable income at this age, even setting a little bit aside can help and accumulate large gains over 40+ years.
As you are planning for your future and investing, you can find there are a lot of options to consider. It is important to ensure that you are appropriately diversified. Some of the ways you can do this is by putting money into mutual funds, low-cost index funds, or investing in a broad range of individual blue-chip stocks. This is a good way to remain diversified, which will reduce your risk.
Use Tax-Advantaged Accounts
There are many tax-advantaged accounts that you can use to help grow your retirement savings. One common option is a 401k, which is an employer-sponsored account that uses the pre-tax income to build up retirement savings. While you will have to pay taxes on withdrawals during retirement, 401ks can also come with employer matching funds that can help you reach your goals. Some other accounts that offer tax benefits include IRAs, Roth IRAs, and various other accounts. Using a good mix of these accounts can help to diversify risk and keep you on track.
Evaluate When to Take Social Security
Another important factor to consider when you are planning for retirement is to evaluate when you should start using social security. While most people are aware that social security will not cover all of their future costs, it can provide some nice additional and stable income. While you may be able to start getting social security when you are as young as 62, the longer you wait, the more you can make on an annual basis. Darcy Bergen believes it is very important to assess when you should start getting the additional income. This will require a personalized approach and factor in tax implications, your retirement age, and other assets that you have at your disposal.
It is always very important that you properly prepare for your financial future. One individual that has helped many achieve their goals is Darcy Bergen. There are various tips that he and other financial planning professionals will recommend that can help you achieve your own.